{"id":795607,"date":"2026-07-12T14:07:20","date_gmt":"2026-07-12T14:07:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/795607\/"},"modified":"2026-07-12T14:07:20","modified_gmt":"2026-07-12T14:07:20","slug":"expert-identifies-trigger-for-next-severe-global-recession","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/795607\/","title":{"rendered":"Expert identifies trigger for next \u2018severe global recession\u2019"},"content":{"rendered":"

A sustained surge in oil prices above $120 per barrel could be the catalyst for the next global recession<\/a>, according to energy analyst Josef Schachter.<\/p>\n

Speaking about the risks surrounding the Strait of Hormuz and global energy supplies, Schachter said the world economy can likely absorb crude prices in the $100 to $110 range, in an interview<\/a> with David Lin published on July 11.<\/p>\n

However, he warned that prices moving into the $120 to $130 range would begin to significantly reduce fuel demand and slow economic activity.<\/p>\n

According to Schachter, higher energy costs would force consumers and businesses to cut spending, creating what economists refer to as demand destruction.<\/p>\n

As fuel becomes more expensive, households drive less, companies reduce transportation activity, and overall economic output weakens.<\/p>\n

He argued that the risk becomes substantially greater if oil prices climb toward $140 or $150 per barrel.<\/p>\n

\u201cIf the price of oil gets up above $120 or $130, I think we\u2019re going to see<\/p>\n

significant demand destruction and probably a global recession. If we got above $150 or $140, you will be in a severe recession. <\u2026>\u00a0 I can see the economy handling a $100, maybe $110, a barrel,\u201d Schachter said.\u00a0<\/p>\n

Under that scenario, the resulting demand destruction could remove between 5 million and 8 million barrels per day from global consumption, potentially pushing the global economy into a severe recession.<\/p>\n

Strait of Hormuz of tensions\u00a0<\/p>\n

The warning comes as investors<\/a> continue to monitor tensions around the Strait of Hormuz, one of the world\u2019s most important oil transit routes.\u00a0<\/p>\n

Roughly one-fifth of global oil shipments pass through the strategic waterway, making any disruption a major concern for energy markets and economic growth.<\/p>\n

Schachter expects market forces to eventually stabilize prices through alternative shipping routes, pipeline adjustments, strategic petroleum reserve releases, and lower demand from major importers such as China.\u00a0<\/p>\n

Recent Strait of Hormuz disruptions have demonstrated how reserve releases and alternative export routes can help cushion supply shocks.<\/p>\n

JPMorgan has also warned that oil could climb to $120\u2013$130 per barrel and potentially exceed $150 if disruptions persist, increasing the risk of a global recession and weaker demand.<\/p>\n

Notably, oil is a critical input across the economy, so sharp increases in crude prices typically translate into higher fuel, transport, and production costs.\u00a0<\/p>\n

This reduces consumer spending power, squeezes business margins, and heightens recession risks as economic growth slows.<\/p>\n","protected":false},"excerpt":{"rendered":"A sustained surge in oil prices above $120 per barrel could be the catalyst for the next global…\n","protected":false},"author":2,"featured_media":795608,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164,186,5476,26473,4846],"class_list":["post-795607","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy","tag-finance","tag-investing","tag-oil-prices","tag-recession"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/795607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=795607"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/795607\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/795608"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=795607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=795607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=795607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}